Earnings Release & Supplemental Report

10-Q Filing

Discussion + Reconciliation of Non-GAAP Financial Measures

• The COVID-19 pandemic continues to evolve. In order to provide more up-to-date information about the impact of COVID-19 on Healthpeak, we have provided certain key operating metrics through October 2020 in a separate presentation posted on the investor relations section of our website at https://ir.healthpeak.com/investor-presentations.
• Dispositions:
  • In various stages on the sales of more than $4 billion of SHOP and NNN transactions:
    • In July - November 2020, closed on the sales of 14 SHOP and NNN assets generating proceeds of approximately $100 million.
    • Approximately $1.5 billion under binding and non-binding purchase agreements across 8 separate transactions.
    • Approximately $2 billion under letters of intent across 6 separate transactions.
    • The majority of the remaining SHOP and NNN assets are actively being marketed for sale.
  • If the various sales are completed, we expect:
    • SHOP assets: a Trailing Twelve Month Pre-COVID (04/01/19 - 03/31/20) weighted average cash capitalization rate in the high 5% range and a third quarter annualized weighted average cash capitalization rate of approximately 3%.
    • NNN assets: a third quarter annualized weighted average lease yield in the high 7% range and EBITDAR yield in the high 5% range.
  • During the quarter, closed on the sales of $15 million of medical office and other assets.
• Acquisitions:
  • In October 2020, executed a definitive agreement to acquire Cambridge Discovery Park, a 607,000 square foot life science campus in the West Cambridge submarket of Boston, MA for $664 million in an off-market transaction, which represents stabilized cash and GAAP capitalization rates of 5% and 6.5%, respectively. The site includes a future densification opportunity of approximately 100,000 square feet.
  • In October 2020, executed a definitive agreement to acquire approximately 12 acres of land for $128 million in an off-market transaction. The acquisition sites are located in South San Francisco, CA, adjacent to two sites currently held by Healthpeak as land for future development: Forbes Research Center ("Forbes") and Modular Labs III. Healthpeak intends to entitle the acquisition sites for a new development of at least 500,000 square feet, which could join with our adjacent sites to create a multi-phase, scalable development campus totaling 1 million square feet or more.
  • In October 2020, acquired a 7-property medical office portfolio, totaling 439,000 square feet, for $169 million, which represents year-one cash and GAAP capitalization rates of 5.5% and 5.6%, respectively. Six of the seven properties are on-campus and all the properties are anchored by a #1 or #2 local health system.
  • In July 2020, acquired a two-story, 107,000 square foot medical office building in Scottsdale, AZ for $27 million in an off-market transaction, which represents year-one cash and GAAP capitalization rates of 7.1% and 7.7%, respectively.
• Development:
  • In September 2020, signed a 10-year 118,000 square feet lease at our Boardwalk development project in San Diego, CA. The development is now 100% pre-leased, with initial occupancy expected in late 2021.
  • In September 2020, commenced construction on 101 CambridgePark Drive, a 159,000 square foot life science development project, located in the West Cambridge submarket of Boston, MA, with estimated total spend of approximately $174 million.
  • In September 2020, delivered a 119,000 square foot, six-story medical office building in Brentwood, TN. The development was 49% leased to HCA Healthcare ("HCA") upon delivery.
  • In August 2020, delivered a 70,000 square foot, four-story Class A medical office building located on the Ogden Regional Medical Center campus in Ogden, Utah. The development was 69% leased upon delivery and is 78% leased today.
• As of October 30, 2020, had $2.6 billion of liquidity including $2.4 billion of availability on Healthpeak’s $2.5 billion revolving credit facility and approximately $150 million of cash and cash equivalents.
• Replaced Board of Directors age 75 retirement policy with a Director term limit of 15 years.
• Declared quarterly common stock cash dividend of $0.37 per share to be paid on November 23, 2020, to stockholders of record as of the close of business on November 12, 2020.
• Established new corporate headquarters in Denver, Colorado.
• Received “Prime” rating from ISS ESG Corporate Rating, recognizing top ESG performance within our sector; nominated for the Corporate Governance Awards 2020 - Best Proxy Statement (Large Cap Company) by Corporate Secretary and IR Magazine; and for the ninth consecutive year, named a constituent in the FTSE4Good Index.